On Monday’s CNBC Mad Money episode, host Jim Cramer examined the top-performing stocks in the S&P 500, focusing on the dramatic turnaround in IT consulting leaders Cognizant Technology Solutions Corporation (NASDAQ:CTSH) and Accenture plc (NYSE:ACN). Addressing how market sentiment shifted around the “AI displacement trade,” Cramer outlined how both stocks surged despite long-standing Wall Street skepticism:
I want to focus on the 10 best and 10 worst performers of the S&P 500, give you a better sense of the situation; maybe there’s some opportunities here for you. When you look at the biggest winners, many of them were the former victims of AI displacement, the AI displacement trade we call it. The best performers, for instance, were Cognizant Tech and Accenture, two tech consulting firms that were up nearly 43% and 33%, respectively. These two have spent years drifting lower as Wall Street assumes they’ve lost their mojo in the age of Claude and ChatGPT. Now look, I never believed wholeheartedly in that thesis, but it never seemed to matter whether I believed it or not. Just last month, Cognizant announced an expanded partnership with Anthropic and Accenture unveiled a whole suite of agentic AI solutions that it’s selling in combination with Google Cloud… In the end, it’s all about sentiment though. When Accenture reported a not-so-hot quarter in June, its stock got clobbered and took Cognizant down with it. Then in late July, Cognizant reported a very similar set of numbers and both stocks roared. Now, I want to see better numbers from these two… But if they can stabilize the results, the stocks are very cheap.
As Cramer pointed out, the narrative that generative AI platforms like ChatGPT and Claude would disrupt traditional enterprise IT consultancies drove both stocks lower. However, recent commercial developments show that enterprise adoption of artificial intelligence requires extensive integration, data security, and customization, which position both companies as implementation partners rather than victims of automation.
Comparing Accenture and Cognizant: Rallies, Valuations, and Partnerships
While both IT consultancies have benefited from the broader unwind of the AI displacement narrative, their recent market performance and strategic focus reveal notable differences. Cognizant Tech (NASDAQ:CTSH) outperformed Accenture plc (NYSE:ACN) during the recent S&P 500 rally, posting a gain of nearly 43% compared to Accenture plc’s (NYSE:ACN) 33% advance. At the same time, Cognizant Tech (NASDAQ:CTSH) trades at around a 12x forward multiple compared to Accenture plc’s (NYSE:ACN) 11.2x forward price-to-earnings ratio.
Recent announcements have highlighted different parts of the two companies’ broad AI partnership ecosystems. Cognizant Tech (NASDAQ:CTSH) has aligned itself closely with Anthropic to expand its software engineering capabilities, whereas Accenture plc (NYSE:ACN) has focused on launching agentic AI solutions paired with Google Cloud infrastructure. While Accenture plc (NYSE:ACN) faced the initial brunt of market skepticism following its June earnings report, Cognizant Tech’s (NASDAQ:CTSH) late July report served as the catalyst that validated both stocks. For investors evaluating the two names, both represent low-valuation opportunities, provided they can maintain operational stability and turn AI partnerships into sustained revenue growth.
Mixed Hedge Fund Positioning and Short Seller Sentiment
Institutional asset managers maintain a commanding presence across both Accenture plc (NYSE:ACN) and Cognizant Technology Solutions Corporation (NASDAQ:CTSH), with major institutions holding substantial core positions. However, Insider Monkey’s data shows that the number of hedge fund holders declined for Accenture plc (NYSE:ACN) in the first quarter of 2026 to 64, compared to 71 in the prior quarter. Nevertheless, elite hedge funds Pzena Investment Management and Marshall Wace LLP increased their positions in the stock significantly in Q1. Harris Associates initiated a position in Q1 with nearly 2.9 million shares.
On the other hand, the number of hedge fund holders for Cognizant Tech (NASDAQ:CTSH) increased slightly to 50 from 49 in Q4 2025. However, it is important to note that one of its major shareholders, Citadel Investment Group, decreased its position in the stock by over 50%.
At the same time, short interest for Accenture plc (NYSE:ACN) remains low in single-digit territory, while Cognizant Technology Solutions Corporation’s (NASDAQ:CTSH) short interest stands notably higher at approximately 12.6% of float. This double-digit short exposure highlights residual short-seller skepticism stemming from the AI displacement trade.
While we acknowledge the risk and potential of ACN and CTSH as investments, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ACN and CTSH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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